How to make money from forex trading

In May, the Capital Markets Authority (CMA) licensed Tadenex to operate as an online foreign exchange broker bringing the number of regulated entities to seven.

CMA chief executive Wyckliffe Shamiah said the authority had noted a keen interest from Kenyans to participate in online forex trading and hence the growing pool of forex brokers and money managers.

Online foreign exchange broker FxPesa under EGM Securities says has since January, trained 136,000 people in Nairobi, Nakuru, Thika, Kitengela, and Eastleigh, indicating the growing interest.

Ms Moonika Jurgenfeldt, chief revenue officer at Equiti Brokerage- Africa operating in Kenya as EGM Securities/ FxPesa, says the depreciation of the Kenyan shilling and fall of global markets offered Kenyans a potential ground to enter the forex exchange market and make profit.

But what do the forex brokers do?

The currencies just like other global commodities are traded as contract for difference (CFD) whereby there is no delivery of the underlying asset and speculation is on their price movement and no physical instrument.

“Everybody who has travelled has probably traded forex. But what we do as online forex traders allow you to trade currencies one against another but in an electronic platform,” Moonika says.

“If you are going to Tanzania, for instance, you would maybe exchange Kenyan shillings to Tanzania shillings where you will be issued the physical Tanzania shilling. What FX brokers do is we give the possibility to exchange these currencies without the underlying need of having the physical currency.”

Kenyans trading in foreign exchange have been raking in profits from the ongoing shilling depreciation, even though the Central Bank of Kenya (CBK) does not allow speculative trading.

To trade, a starter has to fund their account in Kenyan shillings via bank or M-Pesa and the deposit converted into US dollars.

One can also withdraw profits or capital back to their M-Pesa wallet which are converted back to Kenyan shilling, allowing him or her to make returns even under the regulation on trading the local currency.

Speculative trade

“That is one of the ways a client can profit. If one had deposited at the start of the year, did some trading in that period and withdraw now, they will obviously benefit from both sides. That is, from the trades they undertook on the platform and benefit from exchanging the US dollars back to Kenyan shillings while doing the withdrawal.”

The local shilling has lost 5.2 percent of its value to date to an average of 119.09, from 113.13 which was the central bank’s official exchange rate at the start of the year. Commercial banks are however selling $1 as high as 128.

“That is pure profit for you. This is how FX trading works and the only difference is you won’t get the physical currency. You are just able to speculate on different currency movements and make profit out of it.”


The broker that has been in the country for almost five years allows Kenyans to trade over 80 currencies including the US dollar, euro, Turkish Lira, and Swiss franc.

Globally, there are over 400 different instruments including precious metals such as gold, agricultural commodities, crude oil, US and European stocks, and exchange-traded funds (ETFs) - index funds that invest in a pool of securities.

“For the five years we have been in Kenya, currencies are not our most traded instruments but its gold. Kenyans love gold trading. It’s not just Kenya but also worldwide,” Ms Moonika says.

“Gold is something tangible, everybody understands the value of the goal. It’s not as complex as trading, for instance, Great Britain pound against New Zealand dollar.”

Other CMA-licensed non-dealing online foreign exchange brokers are: Scope Markets, Pepperstone Markets Kenya and Exinity East Africa.

There is no limit to the amount required to start and trade.

To open an account, one requires national identification before being issued with a demo account with virtual currency to familiarise with the platform and know how to execute trades before trading with real money.

How do you make profit?

The fluctuation in prices offers potential trading gains and losses.

“The beauty about online trading FX and CFDs is you can benefit from both sides of the market,” Moonika adds.

“For example, if you are trading gold against US dollar and anticipate the gold value to appreciate, you can buy gold when it’s low and cash out at a higher price. If you are anticipating the gold price to decrease you can sell gold while simultaneously you are buying US dollars.”

When global stock markets were crushed following the outbreak of the Covid-19 pandemic in 2020, it triggered a share price-free fall.

The markets continue to fall sharply on the Russia and Ukraine conflict that has led to rising inflation and a slowdown in economies amid fears of a global recession, that Ms Moonika says has been like Christmas-come early for traders.

The Nairobi Securities Exchange (NSE) has also witnessed increased capital outflows running into billions due to the war and profit-taking on some stocks.

“This year the markets are crashing. For online traders that is like Christmas coming early. That is fast money for traders,” she says.

“Market crashes always happen very rapidly and it is a great potential, especially where you can benefit when the markets are going up or down.”

Forex trading as a career

Retail forex trading has offered investors an option for investments in a market that boosts of diverse assets avenues including equities and debt traded at NSE, collective investment schemes, property and real estate investment trusts.

“Something I have come across a lot in Kenya is everybody is always speaking about the land and government bonds. It is important for people to understand you don't have to invest only in Kenya. Money is borderless.”

Handling the risk

FX Pesa has nine total FX educators training students, Treasury departments’ employees, individuals, and corporate. However, just like any other market, the firm says many Kenyans are fearful about the market.

“Ooh it’s so risky, it’s what they say. Or my friend lost all the money there; they blow the account, that's the term they use a lot,” Ms Moonika says.

“But the concept of risk is misunderstood. For you to profit from anything, there needs to be certain there's an element of risk. There are so many risks involved with any investment and business, the same with any online trading.

As the market develops, it has triggered a lot of signal providers and researchers that Moonika says have contributed to the increased fears.

To increase the possibilities of making return, a trader should conduct their own research on the currencies and the host economies such as major announcements affecting inflation and interest rates.

She says online trading is a career like any other. “It could take you three to four years to finish an undergraduate degree. Don’t expect to become a professional trader in a matter of weeks or months. You need to put in the effort.”

“Many people are trying it out to see what it is all about. They think it is just a very quick way to make money or gamble. No, that is not the concept of online trading. Some traders have been doing it for more than 10 years and they are making from it their full-time income.”

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